R&D Tax Credit claims can be a complicated route for businesses to navigate by themselves. Never more so than in today’s rapidly changing landscape. This leads many organisations to enlisting the help of an advisor.
Choosing an advisor can be difficult in its own right. There are huge variations in service levels, fees, and ability between each one, and many will claim greater success than they can substantiate.
Go to a specialist
In general, we have found that your local advisor in a small, local accountancy firm may not be able to serve you with the level of expertise that you need to make a successful R&D tax credit claim. The ability to identify, quantify, and present these claims in a way that maximises return is not inherent in all firms and they may end up introducing a specialist provider for this aspect of the tax-related work that you do together.
On the other hand, while many of the larger accountancy practices across the UK have dedicated R&D teams, the costs and overhead can be significantly greater. In addition, a larger firm may not be able to offer the customer relationship levels that can be achieved elsewhere.
Enter the specialist. An advisory practice that specialises in R&D Tax Credit Claims. These advisors employ their own technical experts who are trained on R&D guidelines. These experts are professionals from the technology sector who have transitioned their job roles to enable innovation in more organisations across the country. In-house technical experts enable a firm both to establish better communication with the claimant’s own tech teams and to better identify qualifying aspects of a project.
Prepare to Invest
The phrase ‘you get what you pay for’ is never more true than it is with seeking financial advice. Often, you will find that there is a trade-off between paying lower fees and quality of work.
As we mentioned, a smaller firm with lower fees simply may not have the expertise available to help you prepare a claim that accounts for all qualifying aspects of the work undertaken. This can lead to your business missing out on potential return or, worse, an HMRC enquiry.
Larger firms, in order to maximise their own return, frequently relegate work with lower fees to junior levels. This means that if you are not paying their higher fees, the headline staff that draw customers in may not be the ones who work to prepare your claim.
Another possibility is that the practices may simply reduce the level of service available to your organisation. This will likely mean that, beyond an initial briefing, the company will work from a simple template filled out by your business. The advisor will then merely cut and paste this information into a standard claim document rather than creating anything bespoke and more effective.
Know what good looks like
Finally, know what you should be getting from your advisor. There are certain deliverables when working with an advisor to put your R&D tax credit claim together that you shouldn’t miss out on.
A robust R&D Tax Credit claim with a specialist advisor should include the following:
- Scoping claim potential through initial briefing sessions on qualifying R&D and allowable costs
- Interviews with the competent professional listed for each R&D project that you claim for
- A clear and informative record of each project’s narrative in the format requested by HMRC
- A clear interpretation of external contracts and identification of which ones qualify
- Assistance in locating and identifying necessary financial information
- Advice on best practice regarding reasonable approximation and estimation
- Identifying capital and revenue R&D expenditure
Your R&D Tax Credit advisor should combine all technical and cost information into a bespoke claim narrative document to present to HMRC. This needs to claim for any available capital or revenue R&D reliefs where appropriate.
The advisor will also provide advice on how this affects overall tax computation and how to detail this claim in your company tax return.
Also, should it prove necessary, a respectable advisory firm will conduct any necessary negotiations or enquiry-related work with HMRC directly.
MSC R&D has been delivering this level of service successfully since the inception of the R&D Tax Relief scheme, and can advise on R&D Allowances and Patent Box.
We also provide a full range of R&D funding solutions, so the understanding we gain of a client's business during a R&D Tax Credit claim can be put to productive use in helping them access the full level of R&D funding they require.
Contact us on 0114 230 8401 or get in touch here to discuss your requirements.
If you have questions specifically relating to the Covid-19 situation, please call our helpline on 0114 263 2632.